Final answer:
In Python, the term for words that have different meanings and outcomes based on capitalization is case sensitivity. Variables and identifiers with different capitalizations are considered distinct, influencing the program's execution.
Step-by-step explanation:
The term for words that have different meanings based on their capitalization in the Python language is case sensitivity. Python is a case-sensitive programming language, which means that variables, function names, and other identifiers that differ in their use of upper-case and lower-case letters are treated as distinct.
For example, VariableName and variablename would be considered two different identifiers in Python. Because of this, the capitalization not only affects the meaning but can also lead to different outcomes in the program's behavior.